Blog : An unpatriotic act?

Ian Nicholls on the ramifications of the Margaret Thatcher-led Conservative Government’s decision not to go ahead with Austin Rover’s sell off to Ford…

On 3 February 1986 the Conservative Government of Margaret Thatcher admitted it was in talks about an American takeover of a large chunk of what remained of the British-owned vehicle industry. The talks were described as being at ‘an advanced stage’. General Motors was interested in acquiring the loss-making Leyland Vehicles division. Ford wanted to buy Austin Rover, Britain’s last home-owned volume car manufacturer. Labour Front Bench spokesman John Smith asked: ‘Is there nothing not for sale?’

Workington MP Dale Campbell Savours accused the Government of ‘dropping the Union Jack and raising the Stars and Stripes over British industry once again.’ This was at the time of the Westland crisis when two cabinet ministers resigned and the Government was accused of selling out the national interest to American big business. On 6 February 1986, the Government discontinued the Ford/Austin Rover talks.

Ford and General Motors given the cold shoulder

Not long after this the General Motors/Leyland dialogue also ceased as the Government climbed down and all British car fans breathed a sigh of relief as the Government backed down from performing a despicable act. Of course, at the time opinion was polarised – many Britons, particularly in Scotland, Wales and North West England, despised Margaret Thatcher and her politics.

The Government climbdown was seen as a victory for common sense. Or was it? This blog concerns the abortive attempt by Ford to purchase Austin Rover. The Government tried to offload Austin Rover after a dire 1985 in which the company performed badly in the sales charts.

In 1986, we were buying…

The Ford Escort (below) was most popular car of the year. Ford also remained in front overall with 26 per cent total sales, followed by Austin Rover with 17 per cent and Vauxhall with 16 per cent. The ten top selling cars in 1985 were:

Ford Escort

Vauxhall Cavalier

Ford Fiesta

Austin Metro

Ford Sierra

Vauxhall Astra

Austin Montego

Ford Orion

Vauxhall Nova

Austin Maestro

This was the full first year that the Metro, Maestro and Montego were on sale. The Maestro was even outsold by the Orion, the booted version of the Escort.

Ford Escort MkIII was the UK’s bestselling car in 1985

Although there was fierce discounting, another factor that hurt Austin Rover sales was something that could not be mentioned in the media at the time, the poor quality and unreliability of the early Maestros and Montegos. Fleet buyers had burnt their fingers in 1984/85, and repeat sales evaporated. This suggested that something was seriously wrong with Austin Rover itself – whoever ran the organisation from BMC to Leyland to the state could not get a grip on the quality issue.

In 1986 no one wanted Ford to buy Austin Rover, but you had to be insane to buy an Austin Rover car! So that was the background to the sale. But was the breaking off of the talks with Ford the right move?

Why did Ford want Austin Rover?

In the 7 February 1986 edition of the Glasgow Herald, Hugh Hunston wrote: ‘The only solid reasons for Ford wanting Austin Rover within its global empire could have been the use of the state owned firms market share to help fight off General Motors British sales threat, or the exploitation of names like Triumph and MG to create a marketing niche for Ford.’

At the time Ford had a 25 per cent stake in Mazda. Only a few days earlier, on 18 January 1986, Mazda had approved for production a project codenamed V705, which became the Mazda MX-5 of February 1989. If Mazda felt there was a market for a traditional sports car, then no doubt Ford agreed with it, especially as it had designs on the market, as its 1983 Ghia Barchetta concept (below) proved.

And two of the best known sports car brands were MG and Triumph, owned by Austin Rover.

For the sports cars?

1983 Ghia Barchetta was Ford’s vision of a sporting future…

Sir Michael Edwardes had discarded these brands because adverse exchange rates had made their export to the American market unviable – and yet they were the one type of car that Ford and General Motors had no comparable rival for. I argue that the decision not to sell Austin Rover to Ford was in the long term calamitous. Spurned by the Government, Ford went on to buy Jaguar and brought in its top notch Production Engineers to bring the Coventry firm’s manufacturing facilities up to scratch and improve quality.

Austin Rover soldiered on, renamed Rover. In the autumn of 1989 Rover took the decision to develop a new generation sports car, the same year as Mazda launched the MX5 (below). By the time the MGF was launched, BMW owned Rover and saw the new sportscar as a threat to its Z-Series roadster – as a consequence of this, the MGF was not marketed in the United States and a whole market went begging.

What actually happened?

The rest of the story is well known. BMW pulled out in 2000 and MG Rover ceased trading in 2005. The Chinese moved in and now the MG brand seems to be going the same way as Rover, Austin and Morris, with poor sales for the new generation MG saloons. MG was a great brand just like Mini, but it has been appallingly neglected and underexploited.

History may judge that Ford was the right suitor for Austin Rover, but it was partnered disastrously with British Aerospace, BMW and the Chinese.

Born in Bedfordshire but now residing in Norfolk, Ian Nicholls is an ardent BL enthusiast. Currently he owns a Jaguar and two classic Minis. A stalwart of the Norfolk Mini Owners Club for nearly a decade he is an enthusiast for all things Issigonis. A stickler for historical accuracy he has recently performed the marathon task of mining the online newspaper articles for all BMC>MG related stories. Ian is unable to help with technical queries – he pays other people to fix his cars!

Another way of looking at this of course – given the complete and utter mess Ford made of Jaguar, Landrover and Volvo, perhaps AR had a lucky escape! Although perhaps a Mondeo based Montego might have had an easier ride than a Ford based Jag.

Ford have proven themselves to be far better custodians of brands than GM, with the former Premier Automotive Group in a reasonable shape while the likes of SAAB and numerous other european factories under GM have closed.

However, I fear ford would have diluted some of A-R’s USP and brand idientity, just as it has with it’s former brands through component and platform sharing.

Not that I am happy with the way things turned out of course. But I feel the eventual downfall of the BL empire was not wrong decisions made in the 80’s, 90’s or 00’s, but maybe those made in the 60’s (austin/morris merger, union prolifferation) and 70’s (BL creation, nationalisation, more union prolliferation).

Agreed that the downfall of the Austin-Rover Group began in the 60s with the BMC merger with Triumph Leyland. The Triumph dominated board ran the company into the ground and had plenty of help from the out of control unions with their hard headed shop stewards. The Big Austin Healey was a popular car as a sports model and it was killed off for no good reason. BMC/LEYLAND should have put their efforts and money into modernizing the electrical systems immediately instead of having stupid 35 amp circuits and alternators and starters that would quit at exactly the wrong time along with fuel pumps and anything else electrical from the Prince of Darkness. The Japanese never had these issues because their electrical systems were modern and the BMC/BL system was just to plod along with pre-war designs.

More ” Prince of Darkness ” drivel . Those of us who had been motoring for quite a number of years at that stage ( 1970s) had absolutely nothing to complain of from Lucas. The first one-third of my 1.5 million miles motoring career was powered exclusively by Lucas and in that time I never had a single failure apart from the odd bulb or two. Would that I could say the same about Bosch, whose fuel pumps on a Peugeot 504TI belonging to my wife nearly resulted in divorce ! By the way, Rick may be wholly unaware that modern low amperage fuses are the result of modern low cross-section wiring which is terribly prone to fire if an excess current situation arises, hence the need for low amperage fuses on modern systems – the earlier Lucas looms were very tolerant of such matters

Obviously your experience and that of LUCAS differ from the modern world. American cars t typically only put high draw fuses on a/c. Such as 30 amp. Even the Japs with their different approach to things adapted a sensible approach. Even if not the high 35 amp
arrangement which could lead to smoking harnesses, although hopefully the fuse blew well before that, the more important issue is that when you gang so many devices on one fuse, it’s just not done except if it’s LUCAS. Having the wipers and motor blower for defrosting, the fuel and temp gauge and turn signals all on one fuse? Not a good idea because in the foul weather you are driving blind.

Lack of proper investment by the government meant that cars were developed on a shoe string. This coupled with poor management and labour relations, and an enforced marriage that made BL, was the recipe of the downfall. Luckily JLR is booming and BMW MINI is not doing badly either.
Thatcher started the fashion of flogging things off. Despite being the 6th largest manufacturing country, 60% of the industry is non UK owned. One can draw a number of conclusions.

One point in the article jumps out as being the explanation to a lot of things.

“……another factor that hurt Austin Rover sales was something that could not be mentioned in the media at the time, the poor quality and unreliability of the early Maestro’s and Montego’s.”

Why could it not be mentioned in the media at the time? Why was the truth not published to the world at large? Why did everybody bury their head in the sand and pretended everything was going ok and the cars were great?

So the press were telling the punters to go out and buy this product which was flawed; the buyers found they had bought lemons, so they ditched poor quality BL products and went for Japanese and German.

I think we should draw caution with Ford as being viewed as a “likely saviour” to Austin Rover Group. Firstly, despite Ford’s imense efforts with Jaguar over a near nineteen ownership period, they never managed to make Jaguar profitable in all that time. True, they expanded the range, updated the factories, improved productivity and raised quality to unimiaginable levels compared to previous generation models. But in the case of the X Type (itself a good car with few vices), the association with Ford did not help its quest to deliver an aspirational model in the Compact Executive market that sold in high enough numbers (for Ford). The ignorant were always making the most noise about the sum of parts shared with Ford.

Also, in the late 1990s, Ford decided to pull out of volume car manufacturing in the UK. Ford’s factories were probably on par with the productivity of Rover Group’s main assembly plants at Cowely and Longbridge. What would have happened to them if they had been owned by Ford?

That said, if Ford had aacquired Austin Rover Group, they may not have been so keen to acquire Jaguar Cars in late 1989, instead seeing both the Rover and Triumph names as convincing premium brands to take on the might of the big three from Germany, based on the need to deliver well designed and engineered products with a noted quality and aspirational image.

Ford of the late 80s was not in a good way, increasingly led by accountants. This would’ve harmed AR, any projects would’ve been costed to a minimum. The Maestro/Montego would’ve been replaced by something similar to the mk5 Escort-based VW Pointer/Logus.

The Honda tie up would’ve been cut short, instead US bosses would’ve insisted that Rover produce twee retro cars, more in keeping with the P4 than the SD1.

With early LR technology, they could’ve had an early leg up in the luxury SUV market, their then Explorer could’ve been a real contender to the Grand Cherokee.

An MG MX5 would’ve been an interesting proposition, though would it have caught on?
The Mazda-based Probe as a replacement for the Capri didn’t. Car buyers tend to prefer their Japanese cars to be badged Japanese, and their US/European cars to be US/European.

Would’ve been interesting to see what they could do with Triumph, perhaps some sort of Mercury tie-up.

Hmmm, the first image shows a confused old woman taking a walk down the fast lane of a motorway, with what looks to be a Police SD1 in the background, no doubt to ferry her back to a nice secure institution…

Anyway, back to the subject at hand… I doubt very much that Ford needed Triumph and MG had they been minded to produce a traditional sportscar- they could have done it quite cheaply using their own components and built it in Mexico for the American market. The lack of a traditional badge never hampered Mazda when they decided to field the MX5/Eunos/Miata. It could be suggested indeed that having a Mazda badge rather than MG or Triumph actually helped that car, because Mazdas have never been saddled with a woeful image of chronic unreliability and poor build quality.

And although Ford may not have made Jaguar profitable, it made Jaguar a viable propositon as a producer, and now Tata is reaping the rewards. Ford’s selloff of Jaguar came at a bad time, as they were not factoring in the explosion of demand for luxury cars in the Chinese market. I think Ford could quite conceivably have made AR a goer- hard to tell how they would have run it based on how they ran Volvo or Jaguar.

Surely Ford would have just bought AR and then closed down the out of date, under-equipped factories the moment there was overcapacity in the car industry – which I seem to remember was pretty much throughout the 90s? Bringing forward what happened in 2005 by 10 years.

BL should have had proper investment by the government, like Renault. Germnan companies benefit from the powerful investment from their regioanl governments, Jananese from the complex company ownership madel instigated by the US after the war. France is very protectionist. What happend with BL would never happen outside the UK. Manufacturing is still treated as ‘trade’ and as an engineer the kudos attached is miles away from that in Germany for example. In addition our financial institutions do care about manufacturing unless the can make a profit out of shorting or mergers and aquisitions. Only now are governmnet understnding the benefit of home grown manufacturing. We flogged off our nuclear industry to EDF meaning that building a nuclear power stations are too expensive.
Finally we have a public who get agitated about very minor meddling by the EU and increasing support for UKIP, but in the same breath slag off anything from a UK company and activly by non-UK product. Before some people comment, I buy what is best, perferably from a UK owned company if availble. If not from another EU owned company.

The problem as I see it with the arguement about lack of investment is that BL did recieve large quantities of taxpayers money, but it was not spent in the right places because the government, the NEB and BL itself lacked the knowledge of production engineering that existed in Ford.
In 1993 Ford replaced the ancient Browns Lane production line that Jaguar had purchased second hand in 1953. Why hadn’t BL replaced it ? Surely that was part of the remit of the Ryder plan? Was it because no one in BL and Jaguar had thought of doing so?
As for why the media did not publicise the quality issues associated with the Maestro and Montego, may be it was out of deference to Britain’s last surviving motor manufacturer, the threat of legal action, the advertising revenue that ARG gave some sections of the media or some other reason. But the fleet buyers would have known the running costs of the competing models and the average time they spent off the road.
I think we in Europe underestimated the kind of brand values that MG and Triumph had in the USA. They had a youthful image, but the market was handed on a plate to the Japanese by BL’s withdrawal.

Regarding the so-called “youthful image” of MG and Triumph in the USA, this is wishful thinking if anything. There are all kinds of products on the market whether it is cars, computers or what have you. With respect to any product, the ultimate appeal and eventually loyalty is determined by first of all performance and durability and then longevity can be taken into account. The MG and Triumph cars along with anything else that came from BMC/BlMC eventually wore out it’s youthful image concept because the Japanese really showed everybody how to make a superior product.

And the BMC/BLMC dealers in the US were getting hosed with poor examples of cars that if not designed poorly, were just not supported properly by warranties and in plain simple English – the cars SUCKED BIG TIME! Once you part with your money, you own it and buyer’s remorse is the rule of the day. Nothing worse than being off the road because your stupid car is always in the shop! I knew a fellow with a TR 7 and that was the case. But it was only the Prince of Darkness Electrics! Geez, if only some thought had gone into updating that part of the car, they might have been more reliable. American AUSTIN/MG/TRIUMPH dealers were dropping like flies and they picked up Datsun as a line to sell because what could be worse than losing customers who used to buy BL cars and now were stung often enough that they no longer were interested in buying a BL car that was going to break down and be in the shop all the time.

“In 1993 Ford replaced the ancient Browns Lane production line that Jaguar had purchased second hand in 1953. Why hadn’t BL replaced it ? Surely that was part of the remit of the Ryder plan?”

But BL inherited all sorts of run down factories, and money went towards re equipping Longbridge and Cowley. At least browns lane survived, unlike Canley, Abingdon etc

I don’t know what Ford wanted out of ARG back in 1986, as ARG back then wasn’t the upmarketish Rover Group that BMW bought in the 90s, but rather a producer of run of the mill family cars, basically volume products that didn’t sell enough, rather than niche products.

The oddity was that Land Rover was lumped in with Leyland Trucks, when even back then the growth was in car like SUVs (the Shoguns and Land Cruisers), and in Range Rover BL had the ultimate luxury SUV, a vehicle that by 1986 had moved well away from its agricultural roots.

There were no profits from Jaguar – or Land Rover and Truck and Bus either. Jaguar couldn’t sell enough units to generate profits (Ford found this as well). Land Rover and Truck and Bus were absolute money pits. The warranty on Land Rovers was crippling (as BMW found). In truth, both Jaguar and Land Rover had been subsidised for years by Cowley and Longbridge – and by the late 60’s they were making barely enough to pay for themselves, let alone carry Solihull and Browns Lane.

I don’t think Ford would have acquired Austin Rover with a view to investing in it and re-establishing it as a successful, separate company. I seem to remember thinking at the time that Ford really just wanted the extra market share. But who knows? In 1994 I thought BMW was the ideal parent….

Strategically Roy Axe was spot on. All ARG cars should have had Honda engines/gearboxes but British chassis, styling and interiors! Then the British imput would have been what we do best and the Japanese imput (quality) was what they do best. Rover R8 cam closest but would have been even better with an 800 type fascia and a japanese 1.3 engine instead of the brilliant but unrelaible K series. Rover 600 would have been perfect with a UK designed interior. Rover 75 was lovely but again the curse of the K series has blighted a very fine car. I run a 1.8 but wish it had a Honda VTEC engine. Everything else is perfect. I like the engine but worry about the head gasket!!

Interesting mention of Dale Campbell-Savours complaining about “the lowering of the British flag of industry” for it was he who approached the Volvo board (who had declined twice before) directly to stir some interest in buying Leyland Bus and told everyone who would listen about how much effort and time he was spending securing the future of the company.

The same MP who again waxed lyrical about his help in securing the Leyland Bus management buy out only for the Leyland Bus management to eventually sell out to Volvo less than 18 months later after some “creative” book keeping which cost Volvo millions of pounds and dozens of UK operators who supported an independent Leyland Bus by placing orders to feel duped.

The same MP who made great publicity by sniping at Volvo again and again for redundancies and subsequent closure of Workington because of the fatal losses incurred by a failing UK bus market, millions in BR railbus warranty claims & countless stock chassis Leyland tried to fob off as ordered units.

The same MP who helped negotiate redundancy payouts with Volvo only to withdraw his support 10 days before the `92 general election and stating his reason for having “other things” on his mind!

I don’t think Ford would have been a white knight for what remained of BL. They competed in same market, for mass market cars. Why would Ford continue developing seperate platforms and engines for BL? Of course they wouldn’t, they would just be rebadged Fords, until BL disapeared altogther.

The big problem for BL, the British car industry and most of British industry, is no long term investment. BL would start to develope a car, the money would dry up and development would stop. This led to a stop/start development process, that left the company with cars that were dated before production even started. Often with too little money to develope more modern engines, or transmissions. Blighting new cars with old equipment.

Basically we lost faith in British manufacturing in the 80’s, we didn’t have the faith to guarantee funding over a 5 or 10 year timescale. Allas the same is true today in too much of British manufacturing and that is why there will be no march of the makers.

Quote “Of course, at the time opinion was polarised – many Britons, particularly in Scotland, Wales and north west England despised Margaret Thatcher and her politics”

You forgot to mention most people in north east England also despised Maggie – and still do. I remember her accusing those who objected to a sell off to the USA of being “anti-American”. They weren’t – they were pro-British !

Ironically it was Maggie who helped Nissan set up its factory in Sunderland as the old state run shipyards and collieries faded away. While not a massive fan of Thatcher , people in the North East and places like Merseyside had to realise their traditional industries were in deep decline from the sixties onwards and the government and taxpayers were becoming tired of bailing out failing nationalised corporations like British Steel. Also, for all people rightly criticise the big rise in unemployment under Thatcher, it nearly trebled in the seventies and cities like Liverpool and Sunderland had unemployment rates over double the national average.

The Ryder plane intended to inject £1 of taxpayers money for every £1.50 British Leyland made in profit. Except strikes meant that they did not make any profit. It was a way of trying to make the workforce behave themselves. Yes, British Leyland suffered from under-investment, but it was self inflicted.

Fords big shake up in Jaguar was with the staff. They were hard. But fair. A few years back chatting with an ex-union rep on a Jaguar factory tour, he admitted the blue ovals no nonsense approach to staffing was really the saviour of Jaguar.

It’s ironic that after the failed bid for ARG, Ford would eventually own Land Rover and Jaguar.
Looking back, I can’t understand why Ford wanted ARG, a company which produced nothing they couldn’t produce, and which had at the time a pretty mediocre (and unreliable) product range. It’s not as if ARG had more upmarket products than Ford either, the SD1 was a direct Granada rival, not a 5 series or Mercedes W124 rival.

Add to that 2 more inefficient UK plants, it’s hard to see the attraction. Was the K series engine enough? Surely it would be easier to just design their own decent engine!

Ford would have had the HCS unit in development in 1986, & an upgraded CVH going into production which makes the buying the ARG just K series unlikely, unless they were already thinking about a new generation based on the K instead of the Zetec?

I cannot really agree about the SD1 . The 2300 might have been a Granada rival, but the 2600 and even more the 3500 were certainly the equal of the 124 Mercedes , which proved to be the start of the calamitous slide in Mercedes quality . The 5 series BMW was equally a very curate’s egg line up, with the bottom ones, 518 and 520, being pretty uninspiring , and the upper ones being rather more exciting. Nonetheless, my M535 from 1985 was nothing like as nice a car as the Rover 3500 I had had some 6 years earlier , even though the quality of the Rover in bodily terms left something to be desired

Internally, XJ40 was matched to 5 Series. SD1 was pitched against nothing. There was never a clear market case made for SD1. An executive hatch back wasn’t wanted in the market, so nobody made one. This was the niche that King spied out, without asking why. The rest, as they say, is history.

I reckon had Ford taken over Austin Rover, then Longbridge and Cowley would have gone very quickly as the Austin range and Rover 200 would have been seen as direct competitors to Ford. Probably what would have happened is Rover production would have been moved to Solihull and only the Rover 800 and Land Rovers remaining in production. Also Ford by the end of the eighties was developing a reputation for unreliable, unrefined engines and the Escort and Sierra were getting on in years, so it could have been a huge mistake
Thankfully Ford never got near Rover and Graham Day saved the company by moving it upmarket, while still producing a range of cars from the Metro to the 800, and privatisation at least meant the company had to earn its way in the world instead of running to the government all the time. By 1990 Rover had reinvented itself as a producer of desirable, well made cars with waiting lists, while Ford had introduced the awful 1990 Escort that faltered in the sales charts.

Austin Rover was still a basket case in the mid eighties. Michael Edwardes might have beaten the unions and introduced a modern range of cars, but the Maestro and Montego soon developed a reputation for serious reliability problems and sales nosedived. By 1986 Austin Rover was third in the sales charts and losses were still high. I very much doubt Ford would have been particularly keen to buy Austin Rover, except maybe Land Rover to gain the Range Rover.
Perhaps what saved Austin Rover was Graham Day. He pruned the company of managers like Harold Musgrove who seemed to think Austin Rover would always be bailed out by the government no matter how awful the company’s products were. Also the tainted Austin brand was phased out in favour of Rover and a huge drive to improve quality started. Privatisation in 1988 made Rover realise it had to earn its way in the world, and an emphasis was placed on producing an upmarket range of cars with the Rover badge and finally introducing diesel versions of the M cars.

Fords track record of integrating companies and managing brands is little better than GM’s and its commitment to the UK, despite selling more vehicles here than in most other European countries put together is appalling. Ford would have asset stripped Austin Rover with only Land Rover any use to them. They would have made exactly the same mess of LR then as they did of JLR in the 2000s, except there would have been no Tata around in the 80s/90s to pick up the pieces. Your dealing with thick, stupid, unprincipled Americans here. Short term corporate Neanderthals who’s only interest in AR would have been the impact it had on next years dividend payments.

Couldn’t imagine they’d want to keep Longbridge and Cowley and Austin around for very long as these cars were competing head on with Ford’s models and weren’t selling very well. It was better for everyone that Graham Day took over, Austin Rover was sold to British Aerospace and Rover made some good cars for a few years.
Also Ford in the late eighties and early nineties had issues of their own and the replacement for the Pinto engines in the Sierra soon developed a bad reputation for unreliability and the CVH engines in the Escort were noisy, not very economical and had starting problems in damp weather.

We would have never seen the best that Rover group could have been under Graham Day, if Ford had done the deal and taken over. They were after Mg, Land Rover, Mini and believe it or not the Rover brand. Rover had a reasonable image then, hence why Day used the Rover brand to untarnish the very tarnished Austin Rover brand by then. As said before, Ford would have asset stripped the company and kept the very good bits, with probably not much left in existence. I still look back to the days of 1989 to 1993 as the glory days for Rover group, where the Rover product was the best it was ever going to get and sales/image went through the roof due to the Honda effect.

Ironically the darkest days for Ford, the horrendous mk5 Escort practically gave sales to Rover’s brilliant R8, Sierra was facelifted and Sapphire was a good looking saloon but the base model was long in the tooth, mk3 Fiesta was their only reasonable product.

The 1990 Escort was Ford’s Allegro moment. A dull looking car with harsh and not very economical engines carried over from the last model, reliability issues like failing alternators and poor hot starting, and just not being very good to drive. I was in a 1992 Escort once which was fairly new and its harsh engine, poor styling and failure to start when it was warm and quite humid put me off big time.

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